Economic Development

It’s important to recruit new businesses to add to our tax base and give our residents employment opportunities. And I recognize that city governments have become players in the economic development game. Public-private partnerships are the way things get done these days. My problem is with the way we are managing these partnerships. I don’t think we’re getting the best bang for our buck.

Here’s what I mean…
When SMC Corporation moved to Noblesville some ten years ago, they asked the City Council for a tax abatement to move their headquarters from Indianapolis. At the time we were trying to lure businesses to the corporate campus and we wanted SMC and their hundreds of jobs, so we granted the abatement.

They built the facility and business has been good. This year, when SMC wanted to expand their building they again came to the council for another abatement. I attended the City Council meeting and expressed my belief that the city had done its part to help SMC get established in our city. It’s time, I argued, for them to step up and do their part. (read my comments to the city council here) It made no difference; the council voted to give them millions more dollars in abatements. The argument was that if we didn’t pony up, SMC could just pick up and leave.

That, of course, is unlikely, considering the millions they have invested in their building here. But even if they did consider moving over this, it simply points out the danger of paying businesses to move here. If all you have to offer is money, the next guy with a bigger purse can always outbid you. Paying businesses to move to Noblesville is a losing game and it has to stop.

A better way is to build the kind of community that businesses want to belong to. Build the infrastructure they need, recruit the labor force they need, establish business-friendly policies that make it easy for them to operate here. But don’t give away precious tax dollars that we need to run our city. The SMC abatement was worth about $7-$8 million over ten years. That’s real money that could have been put to a better purpose. Just two years ago the city council instituted a new tax on trash pick up that continues to increase every year. That money was needed just for deferred maintenance on our streets. I suspect if we hadn’t been so quick to give money to established businesses, perhaps we wouldn’t have had to raise taxes.

My fiscal conservative friends likely don’t agree that some tax incentives are OK. I believe they are, but we have to use them judiciously. It’s all about deal making here and I’m afraid we’ve done some bad negotiating. I’ve been in business all of my adult life and I think we can do better.